'Surrounded by secrecy': Government undecided on Shenhua coal mine

Calls for greater openness over a $1.2 billion coal mine proposed for the Liverpool Plains are mounting after the Berejiklian government admitted it had taken more than two years to make a key decision on the project's future.

China-owned Shenhua applied in January 2016 to have suspended a condition in its exploration licence that required it to make "substantial" progress of the Watermark mine within eight years, according to a document obtained under freedom of information laws by Lock the Gate.

Protesters marched in Sydney on March 24 to protect farmland, water and rural communities from coal and coal seam gas, including the Shenhua mine.Credit:Kate Ausburn

The document showed that it sought a suspension for five years for its special condition 46 (b), that could have triggered the cancellation of the licence, nullifying the need for any refund.

A spokesman for the Department of Planning and Environment confirmed Shenhua had applied for the condition's suspension, but said "no determination has been made...at this time".

He added the department's own assessment was "there were circumstances beyond Shenhua's control that prevented it from making substantial development".

John Hamparsum, a farmer whose property backs on to the licence area, said the government "has been making a lot of excuses" for Shenhua, while leaving the community in the dark.

"We've been living with a knife hanging over our shoulder blades for more than 10 years," he said. "The whole thing has been surrounded by secrecy."

Shenhua secretly sought the suspension of a condition on its mining licence.Credit:AP

Mr Hamparsum, whose 1500-hectare property grows wheat, canola and other crops, said his biggest worry was that the mine's proposed 300-metre pit would "permanently damage the aquifer" feeding the rich farmland in the region.

Destruction of Aboriginal sacred sites and koala habitat, mine blasting seven days a week, and the prospect of long-term salt problems were among his other concerns.

Fairfax Media sought comment from Shenhua.

Georgina Woods, a campaign co-ordinator for Lock the Gate, said the document was an indication the government was "prioritising the demands of the company" rather than taking the opportunity to cancel the licence because of the lack of work on the mine by early 2016.

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The government refund effectively gave Shenhua, which originally paid $300 million for the exploration licence, the money needed to pay a required $200 million mining licence should it proceed, Ms Woods said.

Also pointing to the unnecessary purchase of 51 per cent of the exploration licence was the fact the Mining Act's Section 114A gave the government the option of automatically halving the permit's size when Shenhua sought to renew an exploration permit it hadn't made progress on – unless special circumstances applied.

Lock the Gate and other mine opponents have been fighting to get departments to release information about their negotiations with the miner behind closed doors. The NSW Civil and Administrative Tribunal will hear their case on May 9.

"They are arguing that most of the documents are cabinet documents, but we will continue fighting to bring this secret negotiation to light, since we consider it a matter of profound public interest," she said.